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Uncertainty of Firms' Economic Outlook During the COVID-19 Crisis

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  • MORIKAWA Masayuki

Abstract

This study documents firms' subjective uncertainty during the COVID-19 crisis in Japan using data from an original firm survey and publicly available government statistics. The contributions of this study are (1) the measurement of firms' uncertainty regarding their mid-term economic outlook as subjective confidence intervals, and (2) the comparison of firms' subjective uncertainty during the COVID-19 crisis with that of the Global Financial Crisis by using readily available official statistics. The results indicate that firms' subjective uncertainty increased substantially after the outbreak of the COVID-19 pandemic. The elevation of subjective uncertainty has been far more significant compared with the period of the Global Financial Crisis. However, the economic outlook's deterioration during the COVID-19 crisis has been smaller. The COVID-19 crisis is characterized as an unprecedented uncertainty shock.

Suggested Citation

  • MORIKAWA Masayuki, 2021. "Uncertainty of Firms' Economic Outlook During the COVID-19 Crisis," Discussion papers 21042, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:21042
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    Cited by:

    1. Morita, Hiroshi & Ono, Taiki, 2022. "COVID-19 Uncertainty Index in Japan: Newspaper-Based Measures and Economic Activities," Discussion paper series HIAS-E-116, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.

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